Back in May, the Chinese tech giant was placed on an “Entity List” by the US Department of Commerce. This effectively blocked out Huawei from its business dealings with US companies. Now, at the G20 Summit, Trump says he will allow Huawei to buy products from US suppliers.
Wait, did Trump do a u-turn?
Honestly, it should come as no surprise. After all, back in May Trump himself indicated that Huawei could be included in a potential deal with China. This was while the US was maintaining a stance that the company is a security threat. At a news conference following the G20 Summit in Japan, “we’re talking about equipment where there’s no great national security problem with it,” said Trump.
But what’s unclear is what this actually means exactly. It’s fair to assume this would mean that the company would resume business with their US suppliers, including Google and Qualcomm. At the moment of writing, Huawei is still on the Entity List and there has been no formal announcement. With the ongoing US-China discussions, it’s likely that we may hear an update on the matter once they conclude.
Following the ban, Huawei’s forecasts indicated a possible 40-60% drop in smartphone sales for 2019. But it’s not just smartphone sales. The ban’s long term effects would reach an entire global tech supply chain, thanks in part to Huawei’s role in 5G. Fortunately, it now seems like things are turning around for the better.
Things are still a bit messy for Huawei
To be fair, things aren’t exactly back to business as usual. At least not at the moment. Yes, the US-China trade war is at a standstill owing to discussions. The prospect of resuming business with US companies is also a sigh of relief for the companies, and by extension, the consumers.
But the 5G situation may not be so easily resolved. After all, it was one of US’s key selling points as to why the country sees the company as a security threat. Chances are the Trump administration may continue to advocate for preventing governments in utilizing Huawei’s equipment to roll out 5G. While countries like Australia and the UK have raised concerns regarding security threats. There also the likes of Malaysia and Russia who seems to recognize Huawei as an ally.
Either way, things are still messy for the Chinese tech giant and for the industry at large. But things are certainly looking optimistic, to say the least. Where this situation will end up, depends on how well the US-China discussions go. For now, it looks like the storms may come to pass for Huawei.